Surplus offsets deficit

May 19, 2013

LISBON - The school district spent more money than it took in for the second consecutive year, and again the deficit was eliminated because of a substantial budget surplus carried over from the year before.

School Treasurer Cindy Shultz told the school board during this week's meeting that deficit spending is "a trend you are going to see continue" as long as revenue sees little or no growth.

The information was in the five-year financial forecast delivered to the board by Shultz, who is required by the state to submit these forecasts every May and October.

According to the report, district spending of nearly $8.6 million will exceed revenue by $524,297 by the end of the fiscal school year on June 30. The only reason the district will not end with an actual budget deficit is because of a $3.5 million cash balance carried over from the end of 2012.

Shultz warned the cash balance is starting to dwindle because of the deficit spending and, according to her forecast, will disappear by the end of 2017, when the district is expected to be $303,416 in the red.

She said $42,147 of the $524,297 operating deficit was attributed to a net decline in revenue, and Shultz does not see that changing because none of the state budget proposals being considered by the legislature would result in an increase in state funding for Lisbon. About 70 percent of the district's funding comes from the state.

Meanwhile, the steady decline in enrollment continues, and with it goes state funding, which is based on the number of students. District enrollment is currently 975, a nearly 30 percent drop over the past 15 years from 1998, when there were 1,368 students. The loss is partially offset by the fact the district attracts more students than it loses to open enrollment.

The largest spending increase this year was in teacher wages - $128,779 - which Shultz said was misleading because $85,000 of the amount represented compensation for unused sick days due three teachers who retired. Lisbon teachers are generally allowed to be paid for up to 42 unused sick days upon retirement.

The board continues to do what it can to save money by eliminating and consolidating positions when the opportunity arises, and by undertaking other cost-cutting moves, such as contracting with the Columbiana County Education Service Center to share a bus supervisor.

In related news, the board voted to abolish the home economics teaching position at the high school, resulting in the program's elimination. "This is unfortunately one of those programs we can no longer afford to have," said Superintendent Don Thompson.

The person who held the position was Debra Whitmore, who retired at the end of the 2011-12 school year but was rehired to continue teaching home economics on a part-time basis. Thompson said at the time this was an experiment to determine if the district would continue meeting student needs using a part-time teacher in place of a full-time instructor.

"Am I happy as a superintendent to have to do this? No, I am not," Thompson said.